On January 1, 2024, the Proctor's Restaurant decides to invest in Lake Myrth bonds. The bonds mature on December 31, 2031, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $50,000 maturity value bonds sold for face value. Proctor's intends to hold the bonds until December 31, 2031 Requirements 1. Journalize the transactions related to Proctor's investment in Lake Myrth bonds during 2024. 2. In what category would Proctor's report the investment on the December 31, 2024, balance sheet
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
On
1,
the
Restaurant decides to invest in Lake
bonds. The bonds mature on December 31,
and pay interest on June 30 and December 31 at
annually. The market rate of interest was
on January 1,
so the
maturity
intends to hold the bonds until December 31,
|
1.
|
Journalize the transactions related to
Proctor's
investment in Lake
Myrth
bonds during
2024.
|
|
2.
|
In what category would
Proctor's
report the investment on the December 31,
2024,
balance sheet |
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